Corporate governance and FDIm : firm-level evidence from Japanese FDI into the US

• Main Authors: Wang, Peiming, Alba, Joseph Dennis, Park, Donghyun
• Other Authors: School of Humanities and Social Sciences
• Format: Article
• Language: English
• Published: 2013
• Subjects: DRNTU::Social sciences::Economic theory
• Online Access: https://hdl.handle.net/10356/105569; http://hdl.handle.net/10220/17043; http://dx.doi.org/10.1016/j.iref.2011.11.007
• Institution: Nanyang Technological University

Better corporate governance can reduce the scope for increasing shareholder value and thus discourage M&A FDI inflows. Sound governance may also discourage non-M&A FDI inflows in light of the complementary relationship between M&A and non-M&A FDI. We use firm-level evidence to empirically examine the effect of US corporate governance on Japanese M&A and non-M&A FDI. We find that two landmark US corporate governance regulations help explain the sharp drop in both Japanese M&A and non-M&A FDI into the US during the 1990s. Our evidence suggests that corporate governance may affect both M&A and non-M&A FDI.